Senators Dispute Whether Carbon Cap Will Hike Gas Prices
July 7, 2008 - 7:24 PM
On the Spot (CNSNews.com) - A recent Congressional Budget Office report says a cap on carbon emissions would cause an increase in gas prices that disproportionately impacts the poor, but Senate backers of the Climate Security Act of 2008 -- which caps U.S. carbon emissions -- told Cybercast News Service that it would not significantly raise gas prices.
President George W. Bush and Senate conservatives disagree. They argue that the bill would cause a major hike in gas prices.
"Regardless of how the allowances were distributed, most of the cost of meeting a cap on CO2 emissions would be borne by consumers, who would face persistently higher prices for products such as electricity and gasoline," said a CBO analysis published April 25. "Those price increases would be regressive in that poorer households would bear a larger burden relative to their income than wealthier households would." See CBO analysis
"No. No it won't," said Senate Environment Chairman Barbara Boxer (D-Calif.), the bill's sponsor, when asked by Cybercast News Service about the expectation that her proposal would significantly increase gas prices. "As a matter of fact, gas prices have gone up 250 percent under George Bush. The worst model says it will go up two cents per gallon per year over 40 years. Two cents a year."
Sen. James Inhofe (R-Okla.), the ranking member of the Environment Committee and the Senate's leading critic of global warming theory, offered a sharply different estimate of how Boxer's bill would impact prices at the pump.
"This would be the most devastating increase and redistribution of wealth in the history of America," Inhofe told Cybercast New Service. "Capping supply would have the effect of increasing the cost of gasoline by 53 cents. I can't think of a time in our history when it would be worse to have something like this."
By contrast, Senate Majority Leader Harry Reid (D-Nev.) was even more optimistic in his estimate than Sen. Boxer, arguing that capping carbon emissions will have a positive impact on gas prices. "Gas prices will not go up. They will go down," Reid (D-Nev.) said at a press conference. "That's what this legislation is all about."
Bush, who has threatened to veto the bill, said he believes that the bill's tax on energy producers will be passed down to energy consumers. "You know, there's a much better way to address the environment than imposing these costs on the job creators, which will ultimately have to be borne by American consumers," he said.
An Environmental Protection Agency report on the legislation says it would increase gas prices by as much as $1.40 per gallon by 2050 and cause 44 percent increase in household power bills. See EPA report
If the enacted, the bill would cap the amount of carbon that could be emitted in the United States, and industries that do emit carbon would need to buy permits to do so. The bill would generate up to $6.7 trillion for the government from carbon auctions and sales.
"There is a lot of evidence to suggest that our Republican friends are not quite being accurate on this issue," Sen. Bernie Sanders (I-Vt.) told Cybercast News Service. "Just because our Republican friends are saying that gas prices are going up doesn't mean that it's necessarily so."
Sanders said if gas prices continue to increase, it will be because of speculation in energy and the fact that oil companies are recording record level profits.
Inhofe, meanwhile, said the energy companies won't bear the cost of the legislation. "Don't kid yourselves," Inhofe said at a press conference Tuesday. "The $6.7 trillion price tag is not going to be eaten by energy companies. It's going to be passed right through to you and me as consumers."
Senate Minority Leader Sen. Mitch McConnell (R-Ky.) suggested that Democrats have made a political error by deciding to debate, during an election year, a bill that could raise gas prices at a time when gas prices are already soaring.
"We're amazed that they're calling this bill up at this particular time. I mean, it's a stunning thing to behold. With gas prices being the number-one issue in America, they bring up a bill that objective analysis concludes is going to raise gas taxes 53 cents," said McConnell. "We're happy for this debate. We're thrilled about it. I've never seen my members so excited in recent times over getting out on the floor and talking about a really, really bad proposal."
An email from McConnell's office to reporters called the bill the "Boxer Climate Tax Bill."
Inhofe, who opposed the bill in committee, said he is happy to see the Democrats advancing a policy that would raise energy prices at a time when energy prices are already high. "I don't mind having this debate out in the public where everyone can see it," he told Cybercast News Service. "I want it debated. I want it out on the floor. I want all of America to know what the Democrats are doing by increasing the cost of gasoline and energy."
Sen. Tom Carper (D-Del.) recognized that widespread opposition from Senate Republicans means that Democrats will probably have to wait until next year, when they may have a larger majority, to enact this legislation. "I think it's highly unlikely this legislation will get through," Carper told Cybercast News Service. "We need to reach consensus next year and give the president something he can sign. This is something like a dress rehearsal. Dress rehearsals can be important and this one is important."
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